TST Levels

Latest version of indicator TST Levels: - download

Indicator draws the levels for intraday movement analysis. At this moment supports 3 pair: GBP/USD, EUR/USD, USD/CAD.

The system was developed and tested in a period of 6 years. Analysis is conducted on a daily basis (every day on the basis of the report of the CME -ftp://ftp.cmegroup.com).

1. Day borders of options balance
- topline
- downline
(in the illustration red solid)

2. The level of balance of the day
(on the picture white)

3. Mandatory zone
(figure blue rectangle)

4. Levels of TST
(dashed green and blue levels)

5. The direction of the day

6. Zones
- BUY
- SELL

(dotted red and blue areas)

There a short description of levels and their interpretation.

But since each parameter has lots of interesting properties.

1. Day borders of options balance

Strong levels. Often work on the rebound. The remarkable fact is that in the breakdown case – 99% will be return and retest this level. This especially applies to the strong dramatic breakdowns. This can often make a good profit. Also if the breakdown was in the second half of the American session current day very often close on this level or +/- 10-20 pips.

These same borders give a very interesting signal on Thursdays. Not often. But working out of 100% over 3 years of trading and there not a single failure. I call these days of Clear Day. The signal is always for SELL. How looks that day? The upper boundary, after settlement, is lower than price of day opening. In these days are fulfilled and the Mandatory Zone and the Level of Balance of the day. I repeat: for 3 years there was not a single failure. Deterioration is 100% within 2-5 days. And in these days there is an interesting character: first, the growth of prices up, and then drop down to the target. When the price of such days is growing, I use it for sell deals. On figure (clear day.gif) a typical Clear Day (19 july 2012). As you can see after one day were worked out the Mandatory zone and and after 4 days the Level of Day Balance.

 

2. The level of balance of the day

Performs the role of the “middle” of the pendulum. This is the price that would be arranged and the bears and the bulls. Often work in the current day. Often use to set the Take Profit.

In working with this I use the three properties of this level.
1. As the direction of the day. Moreover, if we go to the level from the bottom to up, it is often the case breakout and continue the direction. If we go to the level from up to bottom – often bounces up or even turn up. Most often the market is moving in the direction of untreated Balance of Wednesday and Friday. That is, most of these levels are checked.
2. As well as at the border of the range – in the breakdown should be return.
3. Another great feature: it is patterns of the Balance of the day for Wednesday, Thursday and Friday. Distinguish between three patterns: “ladder up”, “hill” and “pit” (“ladder down” – there can be but does not work).

The drawings show all three of the pattern (hill.gif, pit.gif, ladder up.gif). The properties of the patterns:
1. If the balances of the Wednesday-Thursday-Friday form the hill, the high probability, that Friday will show the bottom.
2. If the balances of the Wednesday -Thursday-Friday form the pit, then a very high probability that Friday will show the top.
3. Well and the most wonderful pattern – ladder up. He is remarkable facts that if we can see this pattern, then NO DOUBT to put a buy limit on the level of Thursday. And it works at the Buy. Very often the “distant” strong buy starts from this level, the Potential move can reach up to 150 points to 600 points.

 

The main condition for patterns – up to Friday none of the levels should not be done.

3. Mandatory zone

Used to set the take profit or partial closing of the transaction. The Level of the Balance of the day has the property to rebound from the level if it goes from top and go through the level if the price goes from the bottom.

4. Levels of TST

Used to place the order. They are often a reversal levels. They can be used for orders with a very short stops. On these levels and the tactics of work with them, we will talk separately later.

5. The direction of the day

Estimated direction. The calculation based on complex formulas with taking into account the various factors: from the Level of the Balance and the Mandatory zone, up to the values of special Indices TST (see this page).

What I mean by the direction of the day? If the day for SELL that does not mean that the asset price will fall down, this means that the sell trade during the day is likely to be more profitable than to buy trade. Accordingly for BUY the same.

Moreover, it is noticed that very often the price at SELL day first goes up and then fall down. This is similar to the logic of orders opening on more of the “best” price. Why sell at the current, when you can sell above, at more profitable price. Also for BUY day: before going up the price of the first sits down.

There are often very strong signals. I will describe about this signals with mark “VERY STRONG SIGNAL”. These signals are often win on period next day. They are based on the TST Indices. I will show an Example in the section about Indexes TST.

6. Zones

Buy and Sell zone – settlement zone. Most likely in these areas are the set of limit orders. Breakdown of one of the zones leads to a return to the area and coup from its borders in the reverse transaction. Usually zones are very strong and the bounces can be caught as for scalping, as well as for medium-term transactions.

If market with low volatility, the price may visit Buy area after Sell area, and then can go through one of zone. If market is high volatility the price will go through one zone.

 

All that properties is actual for GBP/USD.

For EUR and CAD have differences.

1.EUR/USD
Euro has only the level of balance of the day and levels of TST. And daily balance on euro usually works to rebound both from below and top.
Also on EUR has no patterns. But euro very rear leaves untreated daily balances.

2.USD/CAD
CAD has the same levels GBP. But CAD now working in test mode and all properties not yet explored.

When the analysis is not working?

A week before the expiration of the option until the expiration of the analysis may give the “failures”. 1.5-2 weeks prior to the expiration of futures, as well as 1-2 weeks after the expiration of the futures. This does not mean that work in these days it is impossible. This means that in these days the risks must be reduced and conservative Many Management has to be applied. Expiration Calendar needs to have on hand. You can have a look at the link: http://www.cmegroup.com/trading/fx/g10/british-pound_product_calendar_futures.html

For example, on March 19- futures expiration, in virtue of its specificity, is a serious stress for the market, as in these days is the forced closure of all transactions for expired contracts. For example options expiration, closure of position happens at the request of the holder of the option contract. In this period are possible unpredictable movements and very often we can see it. If you look closely – all week Mandatory zone and the Level of the day Balance were at the top and not done (except Tuesday), so the Friday’s flight up was very likely. Even despite the fact that all of the levels and the zone of Friday far below.

 

Set up indicator on MetaTrader 4 terminal on H1 timeframe.

Indicator updated everyday at 6-8am (GMT).

Latest version of indicator TST Levels:  - download

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